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Carrier / Vendor / Customer LTL Freight Conundrum 

Posted by Marc Wojnowich on Mar 15, 2018 10:32:36 AM
Marc Wojnowich
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As the pendulum has shifted, dramatically favoring the LTL carriers, shippers are realizing that if they don't consider changing their processes, they might very well be looking at increases well over 5% in 2018.

We've posted on rates increases before; as pricing agreements are coming up for renewal, we are seeing "take it or cancel" as responses to inquiries related to massive requests. But not only are pricing agreements reflecting increases, carriers are also bringing accessorials back to life that seemed to have been buried in recent years.

  • Detention... 30 minutes if less than 2500#... or $$$.
  • Over-length - previously 12 ft... now 8 ft.
  • Capacity - previously 750 CFT with PCF < 6... now some carriers 350 CFT with PCF < 3.

We saw a client get hit with a nearly $800 detention fee as a carrier waited 6 hours to deliver at a Trade Show. Given the nature of urgency to deliver to a Trade Show... should the carrier have left? The carrier will certainly send the invoice per the Bill of Lading...to the shipper. So what is the shipper to do...

What about the Vendor shipping Collect? - What urgency does the Vendor have to get the carrier moving?

The Valued Customer? - What urgency do they have to receive the Prepaid shipment?  If its Pay and Add... do you go back to customer and add the $50 per each additional 15 minutes?

So what do we do?Change Freight Management

Every shipper has their unique set of circumstances... 

  • We have always offered Free Freight
    • Do we consider charging for accessorials like Lift Gates and Residential?                        Smaller shipments... Possibly consider use a freight Allowance?
  • To minimize freight cost, we use a lot of carriers, but only two loading docks.
    • Consider analyzing the impact of removing some of the less frequently used carriers. Your data should lead you to a clear cost impact analysis.
  • We want to control freight (rightfully so), but can't control our Vendors' and Customers' urgency to load and unload at their docks.
    • Vendors - While in some cases it may be difficult, a Routing Guide detailing accountability is more needed than ever. Buyers should include this in their purchasing conversation.
    • Customers - You provide a service and manage risk by controlling the freight; this is a value to your customer. Freight needs to be part of the sales process. Not only knowing that the delivery location needs a Lift Gate, but also, the delivery location is able to accommodate deliveries in a timely fashion.
  • We Pay and Add, but the rate keeps changing... How do I know what to charge the Customer?
    • First, you have to understand why the rate keeps changing? 
      • Re-Weigh? - Are you weighing your palletized shipment or relying on possibly outdated OEM specs?
      • Re-Class? - Is your freight class density based? - Are you measuring every pallet and using PCF to determine class? Consider: FREIGHT CLASS CONSULT
      • Detention? - Discussed that one... Need to read more: DETENTION IN LTL
      • Residential / Lift Gate - How are you determining need up front? TMS can help here...

So which quandary do you find your team facing? Please feel free to comment below. Or if you want to discuss some options for your unique case, I always welcome the conversation.

 

Tags: LTL, Detention Fees, Freight Tariffs, Freight Rates, LTL Pricing, Freight Class, Accessorials, Overlength

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